At the beginning of the 20th century, the Danish Social Democratic Party, the trade unions and the cooperative societies had come into the possession of substantial cash funds. The majority of these funds were "earmarked" for use in trade disputes. However, it had long been a thorn in the side of the senior leadership in the movement that these funds were deposited in private banks, thus giving these banks first-hand insight into the financial situation of the labour movement.
The thought of creating a workers' bank was not a new one. Thorvald Stauning, who later became the first Social Democratic prime minister in Denmark (1924), strongly advocated the project, whereas the labour movement was rather sceptical. They feared that a bank for the workers would not have enough cash funds in a crisis situation, and then, naturally, there was the question of initial capital. This is where the successful enterprise Arbejderkul entered the picture.
At the preliminary meetings, it was agreed that initial capital of DKK 2 million was required to set up a workers' bank. At its final meeting on 26 April 1919, the bank committee was able to state that 62 trade unions and cooperative societies had agreed to subscribe shares for a total value of DKK 1,724,000. Arbejderkul alone had subscribed shares to a total value of DKK 1 million, and by investing another DKK 276,000, the enterprise made it possible to set up the bank.
The bank was formally run as a limited liability company. However, the shares could not be listed and could only be held by institutions connected to the labour movement - not by private individuals. Thus, the bank was formally a limited liability company, but in fact a production cooperative for the many branches of the labour movement in relation to the financial sector. And for the workers, the bank was actually a consumer cooperative. It thus provided the many members of the movement with a welcome alternative to the curse of the time: the pawnbroker.
Arbejdernes Landsbank opened during the depression years. Bank collapses were nothing out of the ordinary in the early 1920s, and the fact that, in 1923, the largest bank in Denmark, Landmandsbanken, was facing closure shook society to its very foundations. The bank, which had financed speculative businesses on a large scale during and after World War I, was saved only by political intervention.
Arbejdernes Landsbank almost ran into trouble as well. Paradoxically because of Arbejderkul, which faced considerable financial difficulties in the early 1920s due to a dramatic fall in coal prices and failed investments. Initially the bank's midwife, Arbejderkul now became a millstone around the neck of Arbejdernes Landsbank. This is where the Danish workers' association, Arbejdernes Fællesorganisation, stepped in. By contributing an additional DKK 0.02 a week for each member, the association ensured the survival of the bank. The Copenhagen workers had saved their own bank.
Arbejdernes Landsbank today and tomorrow
Today the Bank is one of the ten largest in Denmark, and it is still a limited company, with the trade-union movement as its main shareholder, but with more than 23,000 private shareholders. The Bank has approximately 1,100 employees, and the customer base is, and will continue to be, private customers, small and medium-sized enterprises, as well as associations and trade unions.
Since the very start, we have stressed that our business should be based on the needs of our customers. This means that we concentrate on business which ensures a good, stable framework for our customers; both when things are going well, and when the climate is not so favourable.
The goal of the Bank is to be a modern, professional and competitive bank, with the customer in focus and with high-quality products at attractive prices.